As of Tuesday, July 1, 2025, Paraguay’s minimum wage has increased to Gs. 2,899,048 (approximately US$365.00) per month. President Santiago Peña officially signed Decree No. 4,122/25, raising the current minimum wage by Gs. 100,739 (around US$12.50), and setting the daily minimum wage at Gs. 111,502 (approximately US$14.00).
This adjustment, announced by the Executive Branch, follows a recommendation from the National Minimum Wage Council (Conasam). Conasam proposed a 3.6% increase based on the year-on-year variation in the Consumer Price Index (CPI), reflecting inflation trends over the past 12 months.
Importance of minimum wage adjustment
President Peña emphasised the importance of this adjustment while acknowledging the deeper challenges within Paraguay’s labor market: “I hope no Paraguayan earns less than the minimum wage. Yet, the reality is stark – over half of our workers cannot afford even this baseline. Adjusting the minimum wage alone won’t resolve these systemic issues.”
The President acknowledged that while the adjustment is necessary to keep pace with inflation, it doesn’t fully address the financial struggles of a significant portion of the workforce. He explained that the current law mandates maintaining purchasing power based on the CPI, a system with both advantages and disadvantages.
“There is a genuine demand from the working class, and we must address that. But in this case, what Conasam did was provide us with the inflation rate they received from the Central Bank of Paraguay over the past 12 months.”
Impacting various industries
This step, following last year’s increase, is the government’s latest effort to support low-income workers amidst economic pressures. Critics argue that the 3.6% increase may not sufficiently offset the rising cost of living, especially for those in the informal sectors where minimum wage enforcement is inconsistent.
The decree will impact various industries, requiring employers to comply with the updated wage standards. As Paraguay faces economic challenges, the government faces increasing pressure to implement broader reforms to ensure fair wages, and improved working conditions for all workers.
